Sep 11, 2026 · 23 min
Mortgage rates test the ceiling as housing activity weakens
How much higher can rates go?
Rates above 7% are reshaping housing demand, while oil, inflation, Treasury yields, and bond-market expectations could determine how much higher they go.
- 1Mortgage rates could reach 7.5% or 8% only if Treasury yields rise substantially and the Federal Reserve accepts that environment.
- 2Bond markets can push mortgage rates higher without a Federal Reserve rate change, responding to economic data and inflation expectations.
- 3Existing-home sales fell below four million as higher rates weakened activity, challenging explanations focused solely on housing inventory.
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Logan Mohtashami rejects the claim that low inventory alone explains the housing slowdown, pointing instead to rates, demand, and changed transaction patterns.
The brief
Mortgage rates have moved above 7% as oil prices and Treasury yields climb. Logan Mohtashami examines whether the current forces could push rates toward 7.5% or 8%.
The immediate ceiling depends on the 10-year Treasury yield, oil prices, and geopolitical conflict. Logan places a near-term range around 7.13% to 7.18% if those pressures persist.
A higher-rate economy could become harder to reverse if inflation accelerates. The discussion weighs rate-hike odds, food prices, and whether further stimulus would sustain spending.
Mortgage rates do not need a Federal Reserve move to change: bond markets react to data and expectations, while spreads have improved compared with 2023.
Existing-home sales fell to a seasonally adjusted 3.98 million after rates moved above roughly 6.65%. Logan argues the slowdown reflects demand and market structure, not inventory alone.
The episode’s sharpest challenge is to the inventory narrative: a functioning market can record substantial sales even when housing stock looks historically scarce.
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